Interview With Maria Bartiromo of CNBC

QUESTION: Thank you so much for joining us. So final days in office here and you have been busier than ever.

SECRETARY RICE: Right.

QUESTION: You went to Mumbai. Tell me what your impression was on the ground in India.

SECRETARY RICE: Well, I was in India to do a couple of things. First, to send a very strong message of solidarity and support to the Indian people and their government and particularly to the people of Mumbai because this was a terrible attack, a heinous crime. And I think the Indians rightly were concerned to make sure that the perpetrators were brought to justice, and that follow-on attacks were prevented.

I then went on to Pakistan to emphasize with the civilian government in Pakistan, the government that I think wants to do the right things concerning terrorism that this was a time to act, that the fact that Pakistani soil had been used by these non-state actors to carry out an attack like this in which, by the way, Americans also died, was of deep concern to the United States. And so that was the purpose of the trip. And so far at least some steps seem to be taken that may lead to those two goals: bring the perpetrators to justice and getting India and Pakistan to cooperate to make certain that future attacks don't take place.

QUESTION: What did you tell the Indians would be an appropriate response to the terrorism?

SECRETARY RICE: Well, I talked about a response that would actually be commensurate with the goals. The goals are to bring the perpetrators to justice and to prevent a follow-on attack - anything that, in fact, would make the situation worse or might introduce (inaudible) consequences is not going to be good for the stability of the region, or really, it isn't going to address what needs to be done, and that was also my message to India.

QUESTION: Do you think there will be war between India and Pakistan?

SECRETARY RICE: I heard no bellicose talk from either of these governments. I heard instead a very deep concern to deal with the situation. Fortunately, we're in a little bit better situation than we were in 2001-2002 when really the two states were on the verge of war, because India and Pakistan have done a lot of work to improve their relations. Frankly, the United States has better relations with India and better relations with Pakistan than in 2001-2002. But it's obviously a dangerous situation. And Pakistan needs to act and act forcefully.

QUESTION: Let me ask you about this report that came out when you were in India - World at Risk report, which said that unless the world community acts decisively and with great urgency it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013? Do you agree with that?

SECRETARY RICE: Well, I can't put a date on anything like that and I frankly don't think anybody can. Obviously this is a danger that President Bush identified some time ago, that -- when he said that allowing these weapons to fall into the hands of terrorists would be the worst disaster that we could possibly face. But we have taken a lot of steps.

President Putin - then-President Putin and President Bush signed a global nuclear terrorism accord that they have now involved many nations in - in terms of information-sharing, in monitoring, trying to make sure that terrorism and weapons of mass destruction never come together in the way that it is envisioned there.

We've also shut down the A.Q. Khan network. It was a black marketeer, a Pakistani scientist, who had the capacity to sell nuclear technology. And while we think it was principally to state actors, there is no reason to believe that it couldn't have been to non-state actors. Getting Libya to the place that it's neither supporting terrorism nor building weapons of mass destruction is important, working with the Russians to secure the nuclear stockpiles and the skills of nuclear scientists, that's another important way to go about this.

And so step by step, the United States and many other important countries around the world have been working to secure these stockpiles and to prevent terrorists from achieving these goals. It's always a danger. It's always a risk, but it is not as if the world has been inattentive to it.

QUESTION: I'd love you to look back and tell us really where the danger spots are in the world, but let me switch gears for a moment and ask you about the move in the price of oil, having come down as far as it has. What are the implications for our allies in the Gulf?

SECRETARY RICE: Yes. Well, unfortunately, on the one hand, apparently some of that is driven by the global economic slowdown. Obviously that's not a good thing. But we are - obviously, we've been concerned that the price of oil could be a problem for international economic growth. And I've been asked many times how about the diplomacy of oil, because some troublesome actors are big oil producers. And I don't think that there's any doubt that, for instance, a country like Iran, which is already suffering under considerable economic isolation from the international community that the lower price of oil is going to exacerbate the economic circumstances, the economic costs that Iran has been paying. We can always hope that, brought together, these factors will lead Iran to take a more reasonable course.

QUESTION: So the price of oil having fallen, that would actually be a positive. Maybe they don't have the wherewithal, the energy, the money, to actually work on their nuclear program in Iran? Would that be a --

SECRETARY RICE: Well, it's more that the - because the revenue stream is so important to Iran, that the costs that we've already imposed on Iran -- and we've imposed some costs through the Security Council resolutions, through isolating Iranian financial institutions and the like -- but I suppose those costs could be exacerbated by the lower oil price.

QUESTION: What about Russia? Does it also impact Russia negatively?

SECRETARY RICE: Well, the problem for Russia is that it didn't use this period of growth in their revenue from oil to diversify the economy. And we're seeing now that the - both some of the political decisions that they made, and the fact of the lower oil prices, is really squeezing the economy. But I would have hoped that Russia would have used this period to diversify its economy more, and it really didn't. And I'm afraid they're going to pay a price for that.

QUESTION: Will there be less stability in Saudi, in Saudi Arabia, because of the lowered oil prices?

SECRETARY RICE: Well, we're still talking about fairly reasonable amounts for oil prices. I think that the Saudi Government has been working on a number of issues that are really of concern. Several years ago, the Saudi Government really wasn't fighting terrorism in the way that it is now and cutting down the financing and arresting al-Qaida. That's going to improve the situation in Saudi Arabia. King Abdullah is someone who has tried to work on some of the issues of reform in Saudi Arabia. And Saudi Arabia did join in this period the World Trade Organization and start making some of the difficult choices in terms of its economy that it will need to make to make that economy ultimately more diversified.

QUESTION: So tell us about the danger spots around the world. You have led the United States diplomacy efforts around --

SECRETARY RICE: Yes.

QUESTION: -- the world. Can you give us a sense of what worries you as you get ready to step down?

SECRETARY RICE: Well, the first point that I'd make is that for those of us who were on duty, so to speak, on September 11th, every day since has been September 12th. I still worry every day that the terrorists are plotting and planning to try to attack us again. There needs to be constant vigilance to make sure that we are using all of the tools that we've developed since September 11th, and that those tools don't erode, to prevent a terrorist attack, because it is not for lack of trying that terrorists are - have not yet been able to bring off another attack. But I worry about it every day.

Obviously, going after their safe havens is important, because those safe havens constitute places of danger. We have seen the problems that the border region between Afghanistan and Pakistan create for stability in Afghanistan, as well as for stability in Pakistan, because some of the terrorists who are using that region are actually attacking Pakistan. I think we've seen in Mumbai that the terrorism problem then in Pakistan becomes a problem for India, and so on and so on. So I would point to these ungoverned regions. We're worrying, as we speak, about the ungoverned regions of Somalia where pirates seem to have managed to stage from.

And so while, obviously, there are continuing problems between states, and there will be for time immemorial, what I've really come to appreciate in this job is the degree to which failed states, ungoverned areas, become really the stalking ground, the breeding ground, for the most dangerous threats to international stability.

QUESTION: You mentioned pirates. How worried are you about the pirates?

SECRETARY RICE: Well, I'm quite worried about the pirates, because while it seems like something that should be from the 19th century or 18th century --

QUESTION: I didn't even believe it when it first --

SECRETARY RICE: I know. Thomas Jefferson came to Secretary of State worrying about the Barbary pirates. We created really the first naval assets because of the Barbary pirates. It looks as though I'm going to leave as Secretary of State more than 200 years later worrying about pirates, but they are a danger. They're a danger to the freedom of navigation. They've been quite bold in what they're doing. They've become more brazen. And the international community needs to respond. We are going to have a ministerial at the security - at the UN on December 16th next week. And the purpose of that is going to be to make certain that we've got the authorities that we need to make sure that there is a real international effort, because we really have to be concerned when freedom of navigation is an issue that's even on the table. And all of a sudden, it's on the table.

QUESTION: What a moment in time you have overseen here at the State Department. Can you characterize your tenure? Tell us what you're most proud of. Look back for us.

SECRETARY RICE: Well, it has been a time of transformative change, and there are several changes that are underway that are going to take a while. They'll take a generation to play out. But I believe in the Middle East, that that course is now better. It's not perfect. It's not all done.

But if you look at the Middle East that we inherited with Saddam Hussein still in power in the geographically perhaps most important state in the Middle East, we now have -- this murderous tyrant is gone. The man who caused his neighbors to go to war, caused us to go to war several times, who invaded his neighbors, sought weapons of mass destruction, used weapons of mass destruction, paid suicide bombers has been replaced by a fragile but democratic Iraq that is a friend of the United States, that won't seek weapons of mass destruction, that won't invade its neighbors, that's being reintegrated into the Arab world.

The Egyptian Foreign Minister went to Iraq for the first time in 30 years, to see the Iraqi flag fly voluntarily in Kuwait. That's a huge change for the Middle East. We inherited an Israeli-Palestinian conflict with a raging second intifada, suicide bombs going off at Israeli nightclubs and Passover Seders, Palestinians dying when Israel responded with a major military offensive. You know, there are little snapshots that you remember. I remember the day that the Israeli - an Israeli mortar shell hit the Church of the Nativity and blew a hole in it.

And now, a good government in power for the Palestinians - yes, Hamas is a problem. But Mahmoud Abbas and Salam Fayyad are good, decent people. There is a real peace process between the Israelis and the Palestinians. And Ariel Sharon, the man who was brought to power in 2001 not to make peace, but to defeat the intifada, has given - gave the statement that Israel and - Israel would have to divide the land, there would have to be a two-state solution. So I think we leave this Middle East in better shape. And probably, Maria, for me, the - having been able to end the war in Lebanon through a peace that we negotiated that left Lebanese sovereignty not just intact but expanded it, those are some of the high points in the Middle East.

But you know, you look back over eight years and there is a lot. The President's work in Africa quadrupling development assistance, bringing about an effort to end the scourge of AIDS and malaria, girls that are in school that were not in school. There's a lot there and I'm very proud of what we've been through.

But from the point of view here at the Department, this is a Department that I'm very proud to have led, that has stepped up to do things that diplomats never expected to do, to serve integrated with their military colleagues in places like Anbar, in Baghdad, and to do so in a way that is helping people to build a decent life in some of the world's most dangerous places.

QUESTION: As you look back, are there things you wish you could have accomplished that you didn't?

SECRETARY RICE: Yes. Oh, certainly. And every Secretary of State leaves feeling that way. I wish we could have done more against some of the murderous tyrants in the world, whether it's the Zimbabwe situation, which I still think we have to do something about - it's time for Robert Mugabe to go. And cholera is spreading in this day and age, in a country that used to be a crown jewel in Africa.

Darfur; the international community should be ashamed of Darfur. We said we would take a responsibility to protect, and we can't even get a Security Council resolution carried out effectively to bring forces in to deal with that terrible situation. And ironically, one of the ones that I wish we had been able to do more is - kind of crosses domestic and foreign policy lines: comprehensive immigration reform. This country's going to have to deal with immigration reform. And President Bush tried. We weren't able to get it done. I hope it'll get done soon.

QUESTION: Lessons learned in dealing with Israel?

SECRETARY RICE: Well, the Israelis are one of America's closest friends based on values. They're a tough people. They can be tough negotiators. But when they feel more secure as they - in their relationship with the United States, and our willingness to say that Israel has a right to defend itself, they'll do difficult things: entering into negotiations with the Palestinians, withdrawing from Gaza, ending the Lebanon war. That solid foundation of Israeli-U.S. relations is the key to a better Middle East.

QUESTION: What can you advise President-elect Obama to do to stop the growing influence of Hezbollah, Hamas, the terrorists?

SECRETARY RICE: Well, I'll give my advice to my counterpart, who - Senator Clinton in private. I know that I've learned that you have to defeat Hezbollah and Hamas and entities like them politically. You have to give people an alternative.

In the Palestinian case, that's going to mean a peace agreement that allows Mahmoud Abbas to say that there is going to be a Palestinian state, and that will defeat Hamas, because Hamas doesn't have an answer for the Palestinian people. That became clear when they "won" the election, and they did and then couldn't deliver. It became clear that they didn't have an answer. Hezbollah doesn't have an answer for the Lebanese people. That became clear when they turned their arms - the so-called great resistance movement turned its arms on the Lebanese people and then, frankly, had to retreat because the Lebanese reacted so badly to that. So these are people who can be defeated politically.

QUESTION: Were you surprised at the choice of Hillary Clinton for the incoming Secretary of State position?

SECRETARY RICE: Oh, no. She's a talented person, a person of intellect, and of strength, and she's somebody who believes deeply in this country. So I think it's a great choice.

QUESTION: You've already had a meeting with her?

SECRETARY RICE: Yes.

QUESTION: How did that go?

SECRETARY RICE: We had a wonderful dinner. We've known each other a long time, since she brought her freshman daughter to Stanford and I was Provost at the university. And we had a good, good talk about the challenges and the opportunities ahead.

QUESTION: What are the most important things she needs to do?

SECRETARY RICE: Well, she will do it naturally, which is to believe in this country and to represent this country with a sense of the great honor that it is. It's also to represent this country knowing that it has its challenges, but it's still the most generous country on earth. It's still the freest country on earth. It's still the country that integrates people of different backgrounds and religious - religions and ethnic backgrounds better than any country on the earth. And you have to defend it. When people say ridiculous things about the moral authority of the United States, you have to call them on it, and I believe she'll do that.

QUESTION: Has the economic slowdown impacted your job? What are you hearing when you're going around the world as far as the slowdown in the economies globally?

SECRETARY RICE: Well, obviously, slowdown in growth worries countries around the world, that they won't be able to deliver for their people, whether it's in many of the emerging countries that - emerging developing countries where they need large job growth to deal with burgeoning populations in places like China or India, or - I was at a meeting of the Pathways to Prosperity, which is the countries in Latin America, with whom we have either free trade agreements or prospective free trade agreements. It was joined by observers from Brazil and Ecuador and Uruguay. And what I heard there is a strong desire to continue along the path of open markets and free trade.

The strongest testaments to the importance of free trade, the strongest testaments to the need to complete the Doha round, a strong argument, eloquent -- from the Mexican Deputy Trade Representative who was there, an eloquent argument from countries like Colombia, that the United States has to lead on trade. That was very interesting to me, in a sense that the G-20 statement recognizing that we cannot repeat the mistakes of the ‘30s when the Great Depression was exacerbated by internal - turning inward and protectionism. Nobody believes that we're in the conditions that we were in the ‘20s and ‘30s, but everybody believes that, whatever our economic circumstances, we could deepen them by protectionist behavior.

QUESTION: So do you worry about President-elect Obama's comments that he may want to redo NAFTA, look at the Colombia deal? I mean, this is obviously one of the best parts of the economy -- the trade situation.

SECRETARY RICE: Well, obviously, the administration will have to set its course. But I can defend fiercely the free trade agreements that we have made. I think NAFTA is one of the best things by the way, negotiated by the Clinton Administration - that has ever happened to this region. If you look at the extraordinary growth in Mexico, if we want an answer to the immigration problem, it's to improve economic conditions in Mexico, and NAFTA has helped to do that. Colombia, the free trade agreement -- a good, democratic country that has fought off terrorists, regained its country from the FARC terrorists, returned hostages to the United States that the FARC held for years, that is improving labor rights, that has signed on to new environmental and labor standards. These agreements that we've made with Peru and Colombia and Panama, the labor standards and environmental standards are now state of the art.

So not only is there a lot to defend in free trade, but I heard a remarkable statement yesterday in Panama from a - one of the participants there who said that the administration has also put trade in a social context, because this president talks now about how free trades and -- free trade and open markets has to lead to social justice. This is not a left/right issue. This is about democratic governments taking the benefits of free trade and economic strength, taking the doubling of foreign assistance that the United States has provided to Latin America, and fighting hard for education of their people, healthcare for their people, a decent life for their people. But you cannot separate the ability to get that decent life, you cannot separate the ability of democratic governments in these regions to deliver (inaudible) their people from free trade. They can't - they are inseparable.

QUESTION: Can we switch gears, ask you about the Republican Party? Has it become weakened? What went wrong? What are your thoughts on the Republican Party?

SECRETARY RICE: Oh, I am not a specialist on American domestic politics. But I think the country tends to go in something of cycles. And in a funny way, a lot of what the Republican Party advocated for so fiercely, to fight communism vociferously and from a basis of values as well as a tough policy, has delivered. It is almost now an article of faith that free markets and open economies are important to economic growth. If you look at the strong push for entrepreneurship, that's now the center in the United States.

And the Republican Party also has done a lot for bringing us to a place that - not that race doesn't matter, but where people can look beyond race. If you look at the last two Secretaries of State, African Americans, they were Republican administrations, the Administration of George W. Bush that appointed them. So I'm sure there will be time to debate this and to refresh the party and I look forward to being a part of that debate. But I do hope that at its center is an understanding that I think President Bush really does have, that we have to be pro-immigrant because immigrants have enriched this country from its beginning, both at the lower end of the economic scale and at the top end of the economic scale.

And this country has got to stay true to its national myth. And when I say national myth, I don't mean something untrue. It means something that is bigger than life. And that is that this is a country where it doesn't matter where you came from; it matters where you're going. And - what really attracted me to Governor Bush at first was No Child Left Behind and the - what he called the soft bigotry of low expectations, and fighting the sense that somehow high educational standards were too much for underprivileged kids to achieve, holding schools accountable, making sure that education is available to all. That's going to be the core of an American consensus for some time to go.

QUESTION: What do you think President Bush's legacy will be?

SECRETARY RICE: Well, I think that President Bush will be known as someone who took really tough decisions when they needed to be taken. When this country was reeling from September 11th -- and I just had a kind of déjà vu about it or a flashback when I was in India - you know, that moment after an attack like that, where you feel vulnerable and you feel angry, and it's a question of how to chart a course. This President charted a course for America. It was one that drew on our strengths. It's one that didn't demonize good people, but spoke the truth about the need to have an answer to the terrorists that was tough, used all of our elements of power, including our military power, but also gave an alternative of democratic development and freedom and liberty as an antidote to terrorism. And I think he will be remembered for having, in that sense, pulled America out of that terrible moment and set it on the right course.

QUESTION: And as the first African American president begins to - his new job, President-elect Obama, what are your thoughts watching this moment in time?

SECRETARY RICE: Well, it's a terrific time for the United States, and it's something that's being seen worldwide, that America is what it claims to be. It's a country that believes that you're American, whether you're African American or Mexican American or Italian American or Korean American; you're American.

And the extraordinary thing about the United States is that phase after phase after phase, episode after episode after episode, we somehow become more and more whole as a great multiethnic democracy. It didn't start out that way. My predecessor, many times removed, the first Secretary of State, was a slave owner. Thomas Jefferson wrote those great words about all men being created equal, and then owned slaves. And so it's not that we were perfect at our founding, and it's not that we're perfect now, but it is that we have worked hard at it, year in and year out, decade in and decade out. And slowly but surely, we're becoming a more perfect union.

And so it says to people who are on that struggle, maybe just beginning it, like Iraqis or Afghans or others -- democracy isn't easy. Multiethnic democracy is really hard. Religious difference is hard to overcome. But democratic institutions are the best way to do it, and over time it can be done.

QUESTION: You said the country moves in cycles. So could John McCain have done anything differently? Was it a mistake for him to choose Sarah Palin as a running mate?

SECRETARY RICE: Oh, Maria, I am not competent to talk about American politics. There are a lot of people who are smarter about it than I am. I think John McCain is a patriot. I think Sarah Palin is a very accomplished woman. And I think that John McCain and Sarah Palin are people who did their best, and democracy took its course. But these are good people. And we're fortunate in this country that we have people like that who are willing to put themselves on the line, put themselves through probably one of the toughest processes that there is in the world, and then not just accept the judgment, but accept it as graciously as John McCain did on the night of his concession speech.

QUESTION: Okay, tell me a little more about education. I know this is very - you're very passionate about this.

SECRETARY RICE: Yes.

QUESTION: What would you like to do when you're out of office in terms of education?

SECRETARY RICE: Well, I'm at heart an educator. I'm somebody who believes in the transformative power of education. I've seen it in my own life. And I believe that every American has to have access to education, and I'm concerned that, particularly for some of our poorest kids, the public schools aren't delivering that. And you know as an educator, I know that education is the way to a better life. As a former Secretary State, or soon-to-be former Secretary of State, I will know that America is not going to lead if we're not confident that our people can take on the jobs of the 21st century in science and technology and innovation.

I know, too, that what is most admired about America is that this is a country that you can come from modest circumstances and do extraordinary things. But you can't do that without the benefit of education. And so if we're not confident that our people can compete, if we're not confident that our great national image and myth about ourselves -- that it doesn't matter where you came from, it matters where you're going - if we aren't confident in that, we won't lead.

And so I hope to go back to something that I worked very hard on before I came; that is, advocating for excellent public schools, providing opportunities for kids to have after-school and summer opportunities, and speaking of this as a national security priority for the United States. And so the educator in me and the Secretary of State come together in that concern.

QUESTION: So what's next for you? What will you do?

SECRETARY RICE: Well, I'll go back to Stanford. I've got to write the great national security foreign policy book that every Secretary of State does, and I look forward to that, maybe with a little distance in between. I want to write a book about my parents who were great education evangelists and made it possible for me to do what I do. My parents were extraordinary. I don't think they ever made $60,000 between them, and yet they gave me every opportunity. And I want to write about that kind of sacrifice.

And I even hope to do something for kids. You know, I get these incredible letters from 12 and 13 and 14-year-olds, and I think that opening up the world to them would be fun to do, maybe a series of books and interactive work for them. Because at that age, they're curious and they're looking for what they're interested in. And I sometimes worry that the world, as we present it, seems a little bit frightening rather than interesting and open. And so I have a lot of projects that I'd like to do, and I'm looking forward to them.

QUESTION: Now, why is our education system so troubled? Why is it that other countries have a better K-12 system?

SECRETARY RICE: Well, I've thought about it a lot, because I don't think it's for lack of trying; even the resources are there to a certain extent. But we have to have really high standards. You know, I remember when President Bush talked about the soft bigotry of low expectations. I grew up in segregated schools in Alabama, and nobody ever let that be an excuse. Nobody ever let the lack of microscopes or the fact that perhaps the schools, were not as good as the schools in some objective sense, as good as the schools across the railroad track. They never let it be an excuse.

And I think you have dedicated teachers out there who are working in social circumstances that are really hard. And I'll tell you, I also don't know that we challenge some of our capable lower- income students to be the best that they can be. I've been looking at the strivers out there, kids who despite their circumstances seem to want to do really good things. And you ask are there opportunities for them to take instrumental music now? Maybe there's a music genius some place out there that's not being served. Are they getting a chance in after-school and summer programs to really pursue math and science hands-on in a fun way? I worry that we're not really giving those kids the kind of opportunity.

And I started something with friends back in 1992 called the Center for a New Generation. It's an after-school and summer academy avowedly to support the public schools. It's not a private school. It's not something that is pulled away from the public schools. And I've had people around the country express an interest in seeing if something like that, which is a program that works with the Boys and Girls Club, might be expanded. I'd like to see what we could do.

QUESTION: How often do you still play the piano?

SECRETARY RICE: Not often enough. But, gee, I've gotten to play it under some extraordinary circumstances. I got to play at Buckingham Palace for the Queen of England not too long ago.

QUESTION: How exciting.

SECRETARY RICE: It was really exciting. But I play maybe once or twice a week. And I still play with my music group about once a month or every six weeks, and I hope to make that more frequent when I'm back in California.

QUESTION: Is it emotional for you to leave?

SECRETARY RICE: Sure, it's emotional, because I've given eight years of my life to this work. It has been the greatest honor to represent this country. I was coming back from Latin America and I was driving up and the plane is there, and it says the United States of America. And it's still a great thrill every time I see that and think that I'm getting on that plane representing the United States of America. This is an extraordinary country. It's so generous. It is so good at wanting to do the right things. Sometimes we make mistakes. Sometimes we do things that have unintended consequences. But I've never doubted for a moment that the United States of America is a force for good in the world.

QUESTION: That's beautiful. Final question, Madame Secretary. Joe Biden said Obama will be tested. Do you agree?

SECRETARY RICE: Of course. Every American President is tested, and tested both by perhaps those who wish to test, and tested just by circumstances. The United States is involved in every corner of the globe, you know. We try to improve, and I think we have relations with every continent.

I think - when I think back to our coming here in 2001, our first big international crisis was with China. They forced down an American EP-3 airplane on an island, and people almost don't remember that crisis now. They held our people for several days, and it was a terrible crisis. And I look now, and our relations with China could not be better. In fact, across Asia our relations could not be better.

So yes, there is always something. And the question is what do you do. And you have to stand tough and you have to stand strong. But then you have to be able to move on and make opportunities out of difficulty. And if I look at the evolution in the relationship with China, I have those two data points in my mind: the day that we found that they'd forced down our airplane and were holding our military people; and today, when it's really one of the most transformed relationships that we have -- a relationship where we still differ on issues of human rights, and where we've been willing in the toughest possible way to say that, where the President has been willing to meet with the Dalai Lama even though the Chinese don't like it, but where - I was just on the telephone with the Foreign Minister of China talking about how to move the Six-Party Talks on North Korean disarmament forward, and talking about the piracy issue and how we might cooperate on that.

So yes, testing will come. Be strong, and then try to build on that for new opportunities.

QUESTION: Let me just ask about China. So China is a friend?

SECRETARY RICE: Well, China is a country with which we have developed very good working relations. We still have differences with China, particularly around issues of human rights, democracy, issues concerning Tibet. And we found a way to transform our relationship with China, improve it, even, I think, help to improve the relations on the cross-straits issue between Taiwan and China; but still speaking out on Tibet, still the President meeting with the Dalai Lama, still the President able to talk about human rights in a straightforward way. And that's the way that you have to deal with these big, complex relationships, where we don't actually share values, but we share interests. And I think we're very proud of the circumstances we've left in Asia.

QUESTION: That's a good way to put it - not values, but interests.

SECRETARY RICE: Yes. And if you do that, and you can contrast it with a country like India, where we really have a transformed relationship, a deeper and broader relationship than ever, there we share values and interests with this great multiethnic democracy. But you can have good relations with countries with which you don't share values. The kind of deep friendship that we enjoy with some countries, I think takes the need for common values.